Assignemnt- SABMiller: The Case for Sustainability Reporting

ABSTRACT

This case study focuses on the emerging global issue of sustainability and integrated reporting for corporations. With the pressure on the environment from climate change, increasing global population, and depletion of natural resources, accountants are ideally positioned to support their organizations' efforts to adopt sustainable business practices and to measure and report sustainable business activity. The case introduces the students to sustainable business reporting frameworks and provides them the opportunity to analyze SABMiller's sustainability reports. Students learn about sustainability core key performance indicators (KPIs),the importance of cost/benefit analysis in developing sustainable business practices, the role of the professional accountant in sustainability reporting, and the importance of the assurance function to provide third-party reliability for sustainability reports to investors.

Keywords: sustainability reporting; integrated reporting; sustainability key performance indicators; SASB; GRI; corporate social responsibility

REQUIREMENTS

SABMiller's CFO and the Board of Directors Corporate Accountability and Risk

Assurance Committee (CARAC) asked you to respond to the following questions.When answering the questions, please use the SABMiller 2015 Annual Report and Sustainable Development Summary Report that are listed in the reference section below. Additionally, you may also cite validated references from the university library or the Internet. Your responses to the questions should address the requirements in detail, providing citations of sources used.

1. a. Access SABMiller's 2015 Sustainable Development Summary Report. List five shared imperatives as well as sustainable development targets for 2020. Explain why these imperatives are ‘shared'? Based on your reading of the strategy (see SABMiller's Annual Report, pages 46-51) has SABMiller integrated sustainability initiatives in its business strategy?

b. Describe progress to date in achieving the sustainability goals on core key performance indicators (KPIs) as reported in the SABMiller's Sustainability Assessment Matrix reporting tool. Why is disclosing this information important for SABMiller? What do you think company's motivation is for providing sustainability disclosures?

c. Access the 2014 Anheuser-Busch InBev NV Citizenship Report (pp. 8-9, 16, 46).. Compare this report with theSABMiller's 2015 Sustainable Development Summary Report. In your opinion, are these reports comparable? Identify four common industry-level sustainability disclosure topics and accounting metrics (KPIs) in these reports.

2. What is the Global Reporting Initiative (GRI)? In addition to Prosper targets, SABMiller's 2015 sustainability report also used the GRI4th generation framework, G4, as a secondary index. Access the G4 Sustainability Reporting Guidelines and list GRI principles for defining report content and quality (pp: 16-18). In your opinion, is SABMiller's 2015 Sustainable Development Summary Report prepared in accordance with the GRI principles for defining report content?

3. What is the International Integrated Reporting Council (IIRC) and what is its purpose? Based on your assessment, does SABMiller's integrate sustainability information with financial information? How would you see the link between SABMiller's sustainability reporting and integrated reporting?

4. SABMiller's Board of Directors engaged the Big Four accounting firm PwC to provide limited assurance on SABMiller's 2015 Sustainable Development Summary Report. Review the Independent Limited Assurance Report to the Directors of SABMiller prepared by PwC.What was the scope of the assurance assignment, why was limited assurance provided, and what assurance standards did the auditors follow?

5.a. Discuss cost/benefit considerations in setting and reaching SABMiller's sustainability goals and its impact on the company's profitability and its ability to create value over time. Explain two cost savings that SABMiller reported in the 2015 sustainability report.

5.b. What concerns might an investor have about sustainability initiatives? Do you think that investors have the right to expect companies to adopt sustainable business practices and issue reports summarizing sustainable business practice performance? Please explain your answer.

6. In light of the 2014 SABMiller's sustainability report, comment how the role of the professional accountant is impacted by the increasing focus on sustainability reporting?